Ahead of the Curve

The lending environment is undergoing a worrying change. Funds that European direct lenders have raised but not yet deployed are at an all-time high and banks in most Western-European jurisdictions have renewed lending following years of reticence after the global financial crisis, leading to increased competition amongst lenders in the small and medium enterprise (SME) market.

AMIC to push corporate governance with EU paper

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EUROPE - The Asset Management and Investors Council (AMIC) is working on a corporate governance paper in conjunction with the European Union.

The aim of the paper is to encourage asset managers to address corporate governance issues and increase their transparency to clients.

Corporate governance is one of the biggest topics concerning institutional investors in Europe, according to Bob Parker, AMIC chairman and senior advisor at Credit Suisse.

"But while the asset management industry should have been more aggressive in terms of corporate governance it cannot be blamed for the financial crisis alone," he said.

Parker says the other main issue is the securities valuation of illiquid assets or assets in illiquid markets. "It is a very difficult but hot subject at the moment," he said. "One is questioning whether everyone is correctly pricing the securities in their portfolio, such as Spanish savings banks valuing the real estate assets in their portfolio. What are they valuing and why?"

"In less liquid markets, investors want to employ active managers, while in liquid markets such as the US they tend to use indexation. The gold market is a good example of that," he said.

"The alternatives industry is all over the place. There is a lot of interest in infrastructure by pension funds, but there are also a lot of walking wounded in the private equity industry at the moment."

An AMIC working group is also in the process of setting up a charter on private banks, which is expected to be published in late July.

AMIC was set up in 2007 under the auspices of the International Capital Market Association (ICMA) to represent the global asset management industry and investors on a supranational basis. Its members include asset managers, pension funds, banks, insurers, sovereign wealth and hedge funds.